Motor Vehicles?
- Thread starter Roz
- Start date
Yes Roz, some cars do depreciate faster than others. There's lots of reasons, including the build quality of the car, and the car company's marketing strategy.
It doesn't matter much to me, as I tend to keep my cars until the wheels fall off, but for instance it affects lease companies big time, as they price their leases based on how much they think they can offload the car for in 3 years time. If you intend to change cars in a few years time, the resale value will have a big impact on your cost of ownership.
In 2005, it's predicted a current Porsche 911 Carrera will be worth 69% of its current price, ie. it will drop from $187,600 to $129,444. That's a loss of $19,285 per annum.
However that residual is better than you'll get for a Commodore or Falcon, which will drop to 50-59%. The more expensive models (Caprice, LTD) tend to lose more over the period.
In a quick scan, the best 3-year residual I found was the Mercedes-Benz CLK 320 Avant-Garde Cabriolet (74%). The worst residuals I found were the Ford Falcon LTD, the Honda NSX, and the Lamborghini Diablo which are all expected to lose more than half their value over the 3 year period.
Of course half the price of a Falcon is somewhat less than half the price of a Lambo..
What does that mean to me? If a 2-3 year old car has all the features I want, it's an attractive purchase because it's just been run in, the first owner fixed all the warranty problems, and I get anything up to a 50% discount! Perhaps a 3 year old Lambo...I'll note that in my doodad file.
It doesn't matter much to me, as I tend to keep my cars until the wheels fall off, but for instance it affects lease companies big time, as they price their leases based on how much they think they can offload the car for in 3 years time. If you intend to change cars in a few years time, the resale value will have a big impact on your cost of ownership.
In 2005, it's predicted a current Porsche 911 Carrera will be worth 69% of its current price, ie. it will drop from $187,600 to $129,444. That's a loss of $19,285 per annum.
However that residual is better than you'll get for a Commodore or Falcon, which will drop to 50-59%. The more expensive models (Caprice, LTD) tend to lose more over the period.
In a quick scan, the best 3-year residual I found was the Mercedes-Benz CLK 320 Avant-Garde Cabriolet (74%). The worst residuals I found were the Ford Falcon LTD, the Honda NSX, and the Lamborghini Diablo which are all expected to lose more than half their value over the 3 year period.
Of course half the price of a Falcon is somewhat less than half the price of a Lambo..
What does that mean to me? If a 2-3 year old car has all the features I want, it's an attractive purchase because it's just been run in, the first owner fixed all the warranty problems, and I get anything up to a 50% discount! Perhaps a 3 year old Lambo...I'll note that in my doodad file.
For me, my last (and first) lease vehicle was a 2 yo Ford Falcon. So a good part of the depreciation has gone already.
It will drop in value from $19,000 to $8,000 in three years. $4K pa- better than a Porsche. Percentage wise- nowhere near as well.
But I've had an incredibly reliable car. And because it was bought by the company via salary sacrifice, it's costing me in the three years not that much more per annum than the 15 yo $6K bomb I used to drive- where all expenses were after tax.
It will drop in value from $19,000 to $8,000 in three years. $4K pa- better than a Porsche. Percentage wise- nowhere near as well.
But I've had an incredibly reliable car. And because it was bought by the company via salary sacrifice, it's costing me in the three years not that much more per annum than the 15 yo $6K bomb I used to drive- where all expenses were after tax.
I have a 1961 VW Beetle. (and it doesn't have a fuel guage either...).
This car didn't seem to depreciate too much though..
According to the Redbook:
Price when new is $2052
National average price - private sale is between $1400 - $3200
In fact, judging by the figures mentioned above, looks like this car has appreciated over time too!!!
And guess what? I only paid $900 for it!! I got a bargain!!
This car didn't seem to depreciate too much though..
According to the Redbook:
Price when new is $2052
National average price - private sale is between $1400 - $3200
In fact, judging by the figures mentioned above, looks like this car has appreciated over time too!!!
And guess what? I only paid $900 for it!! I got a bargain!!